13 May 2005, 15:54  Bank of Japan: we won't chande our monetary policy

Bank of Japan Governor Toshihiko Fukui said on Friday the central bank would not waver in its commitment to maintain easy monetary policy even as it debated a reduction in funds it supplies to the banking system. "We will firmly maintain our framework of providing more liquidity than required in accordance with our promise based on the consumer price index," he told the Japan Association of Corporate Executives (Keizai Doyukai), a business lobby. The BOJ has pledged to maintain its current "quantitative easing" framework of flooding the markets with liquidity until year-on-year changes in the core consumer price index stabilise above zero. But some BOJ Policy Board members have suggested lowering the amount of extra funds the central bank provides to the market as commercial banks' demand for emergency funds ebbs along with a recovery in the financial system.

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